The Partisan Split in August Sentiment

Michigan 67.8 vs 66.7. Big jump in expectations 72.1 vs. 68.5 (as opposed to current situation).

Figure 1: University of Michigan Consumer Sentiment (blue), Conference Board Consumer Confidence (tan), Shapiro, Sudhof and Wilson (2020) Daily News Sentiment Index (green). all demeaned and normalized by standard deviation (for the displayed sample period).The News Index observation for August is through 8/11/2024. NBER defined peak-to-trough recession dates shaded gray. Source: U.Mich via FRED, Conference Board via Investing.com, SF Fed, NBER, and author’s calculations.

But aggregates miss out on part of the story.

Survey director Joann Hsu notes:

Overall, expectations strengthened for both personal finances and the five-year economic outlook, which reached its highest reading in four months, consistent with the fact that election developments can influence future expectations but are unlikely to alter current assessments. Survey responses generally incorporate who, at the moment, consumers expect the next president will be.

Here’s the partisan breakdown:

Figure 2: University of Michigan Consumer Sentiment for Democrats (blue) and Republicans (red). NBER defined peak-to-trough recession dates shaded gray. Source: U.Mich and NBER.

In August, the change in sentiment is split, with Democratic and Independent respondents indicating a rising sentiment, and Republicans a declining. The increase for Democrats in August is about one standard deviation from average.

Hsu notes:

With election developments dominating headlines this month, sentiment for Democrats climbed 6% in the wake of Harris replacing Biden as the Democratic nominee for president. For Republicans, sentiment moved in the opposite direction, falling 5% this month. Sentiment of Independents, who remain in the middle, rose 3%. The survey shows that 41% of consumers believe that Harris is the better candidate for the economy, while 38% chose Trump. In comparison, between May and July, Trump had a 5 point advantage over Biden on the economy.

 

 

6 thoughts on “The Partisan Split in August Sentiment”

  1. pgl

    Democrats and Independents are positive as the next President will be competent and the former Traitor in Chief will be in jail.

    Republicans on the other hand realize our next President will be someone they dishonesty dub as a Marxist.

  2. pgl

    “Her policies rival some of the most socialist and authoritarian models from world history. Instead of unleashing American energy and reducing the burden on our people, she would impose price controls that are something out of Venezuela or Cuba,” senior Trump campaign adviser Brian Hughes told reporters. Trump officials were particularly critical of a federal ban on price gouging, equating it to government-imposed price controls.

    Harris’s plan includes pushing for the Federal Trade Commission and state attorneys general to investigate how corporations exploit consumers by raising prices for profit, and she will call for increased support for small businesses that can break into the market and compete against major meat processors.

    https://www.msn.com/en-us/news/politics/trump-advisers-slam-harris-economic-plan-something-out-of-venezuela-or-cuba/ar-AA1oVTiy?ocid=msedgdhp&pc=U531&cvid=6052bcb11beb4ea6b5e99ef767a6e100&ei=6

    Oh gee – Trump mixes up the market for energy and the market for food again. Now had the MAGA morons actually listened to Harris, they may have noted that her ideas are not Marxist price ceilings but rather enforcing competition. But yea – they (like clueless Noah Smith and moronical Bruce Hall) do not get basic economics.

    1. pgl

      Brad listed a few major biopharma multinationals including Amgen. It seems the IRS is going after the transfer pricing for Amgen in a big way. Next major Tax Court battle!

  5. pgl

    Moses noted that John Cochrane had a couple of discussion of the Harris proposal to increase competition in the food sector where old Grumpy talked about monetary policy and food during the Roman Empire. Since Grumpy’s knowledge of microeconomics stopped with what Adam Smith wrote during the 18th century, I thought I would put together a short reading list for this right wing economic know nothing:

    Cournot Recherches sur les Principes Mathématiques de la Théorie des Richesses (1838).

    Bertrand, J. (1883) “Book review of theorie mathematique de la richesse sociale and of recherches sur les principles mathematiques de la theorie des richesses”

    Edgeworth, Francis (1889) “The pure theory of monopoly”

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